Ballad Health CEO says nursing contract agencies 'distorting' labor market

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After giving testimony Oct. 7 to a congressional subcommittee on health, Alan Levine, president and CEO of Johnson City, Tenn.-based Ballad Health, spoke to News Channel 11 on the staffing challenges the health system is facing, including labor cost increases caused by contract agencies that he said are hitting rural communities the hardest.

"The entire healthcare system is buckling under the weight of this problem; the labor market is completely distorted. And here you have contract agencies taking nurses out of one hospital, paying them triple to go to another hospital right down the street, and extracting enormous profits from that," Mr. Levine told News Channel 11. "I do believe it's contributing to distorting the marketplace, and I do think it's causing some harm." 

He told News Channel 11 that in the quarter ending September 2019, Ballad Health spent between $3 million and $5 million on contract labor. At the end of the same quarter this year, it spent $23 million — an increase he said will be permanent. He said in his testimony that travel nursing is hurting small communities that can't compete with the agencies to keep their hospitals staffed. 

"When nurses who show up to work every day, are working next to somebody who doesn’t know anything about the culture in their hospital, doesn't know anything about the technology, and by the way, they're part of a contract agency where there’s huge profits being made, this is not sustainable," Mr. Levine said. 

Mr. Levine is not the only one pushing back against travel nurse agencies. In February, the American Hospital Association called on the Federal Trade Commission to investigate agency practices, and the California Hospital Association put through a similar request to the state attorney general. The agencies have provided some nurses with pay increases to the tune of 400 percent. As of September 2021, there were about 30,000 open travel nurse positions across the U.S.

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